Downward Trend in Initial Jobless Claims Is Flattening Out

The number of Americans filing for unemployment benefits unexpectedly rose last week, hitting their highest level in more than three months, likely as a cold snap kept some workers at home.

The news story uses the seasonally-adjusted numbers, which I'm not crazy about. There's always an easy way to incorporate seasonal issues: simply make year-over-year comparisons.

If we do this — using the non-seasonally-adjusted data, we find that there is indeed some slow creeping upward in YOY numbers. But note that the YOY changes still mostly remain in negative territory:

Last week (January 6), the YOY change in initial claims was still down 2 percent, although the change was flat at zero percent the week before that (December 30).

As the graph suggests, the downward trend has lessened, and we're seeing more and more YOY changes clustering around zero in recent weeks.

A similar trend emerges if we look at monthly totals. December 2017's initial claims were down 5.6 percent compared to December of 2016. That, however, is one of the smaller YOY declines we've seen in recent years. With the monthly data, also, we see a slowing in the downward trend. Initial claims even went up last September, compared to September of 2016, rising 7 percent. But most monthly comparisons continue to show downward movement in total claims.

This flattening out will probably continue as the current expansion continues, although by itself, this data does not suggest any sort of turning point in the current economic trend.

For greater context, here's are the monthly numbers over a ten-year period: